Sandel Builds Generational Wealth With Rentals and FlipsReading Time: 8 minutes
Sandel invests in both rentals and flips and teaches his kids about investing, so they can build wealth over the long-term. He enrolled in the Fortune Builders course to gain the knowledge necessary to create a successful real estate business.
The house he found on MyHouseDeals was priced at only $51k and he expects to sell for over $100k. He plans to rent the property.
He advises new investors to stay persistent and not let fear stand in the way of getting good deals done. His training taught him how to accurately calculate repair costs and create a strong investing team.
Read on to learn about:
- Taking the first steps when investing
- Calculating repair costs
- Creating a system
NOTE: Sandel is a premium member. He received a FULL refund of his upfront membership fees for simply doing a deal! Find out more about our premium membership here.
Below you can play the audio of the interview:
What made you interested in real estate investing?
I’m a member of Fortune Builders, and I used to be a mortgage broker, so I’ve always knew that doing real estate deals was the best way to make money.
How did you acquire your knowledge?
I went to a three day Fortune Builders class and I’ve been doing intensive training class for the last two years. They go in depth on how to set up a corporation and all the legal aspects of it.
What were your initial fears as you were getting started?
They always tell you just find a property, get the contract, and then find the money. But, a lot of times when you find these contracts they want $5,000 down, so the fear of losing money is always a reality. The biggest fear at first was just buying that first house, to be quite honest with you.
Was it scary when you got the first house under contract?
At first, the fear was there, and then it began to dissipate as I got the funds lined up, the lenders lined up, and knowing that this from putting a down payment to actually knowing that I’m going to own this piece of property, and then going through the next steps of rehabbing it and stuff. That became exciting. It was a stressful … My first one was extremely stressful, but it was lucrative, so it was a combination.
How did you learn enough to do your first deal?
I did a lot of studying and reading on my own. Fortune Builders provided some systems like the repair estimator, and they have floor plans of different houses that I use to model my house after, which helped out a great deal.
Are you a full time investor now or still part time?
No, I’m a full time teacher and I’m a part time investor, but eventually, my goal is to make that transition over little by little to becoming a full time investor and a part time teacher.
Would you enjoy teaching people how to invest?
That’s interesting that you mention that, because the name of my company is Invest in Family, and we have four kids who just graduated from college, and I have two other ones in college as well. So when I joined, before I joined Fortune Builders, we all went to this three day seminar. I like to involve my kids and teach the about investing. I’m hoping we can use this as a way to build generational wealth.
How has real estate investing changed your lifestyle in general?
My wife and I try to vacation at least twice a year. The investing definitely helps out financially. Our first house was a bit more challenging because we didn’t have a team in place. We didn’t have a contractor to do the plumbing, or an electrician or a painter. So now we’ve got all these guys in place, so when we find a house I can just call these guys up and say, “Hey, look at this house, what do you think?” They’ll give me an estimate, and at that point I’ll know if it’s worth my time or not to pursue it. My kids can use the same team with their properties.
Would you say the most difficult part of building a business is just getting started and building the team?
It’s the team and it’s the system. If you don’t have a system, if you’re ad libbing every time, then you’re never going to flow. McDonald’s for example could be run by kids or old people because they have a system.
Every successful business has a system. At Chic-Fil-A, you can put anybody in there and they can run it, because it’s the system that runs it. It’s not the people.
Are you more interested in doing the buy and holds or fix and flips?
My first property, I flipped it and made a nice chunk. Then, my next two, I bought for rental income, and I’m actually buying another one now. So ideally, I would like to flip one, buy two or three for rental income, and then flip. My goal is to get at least about 20 or more, even get commercial properties, as far as passive rental income. I have four kids and ideally we could have five to 10 properties each for the kids.
When you first saw the property on MyHouseDeals, what types were you initially looking for before you saw this one?
I was actually looking for fix and flips, to be quite honest with you. The price point was good. I have a realtor who provides property values and I do the comparables myself. We try to find properties that are by schools, since we’re teachers as well. We looked at the property on MyHouseDeals, and I knew we had to move fast. The wholesaler did a good job with the pictures. He was true to his word. I told him I liked it, and I wired him the $5,000 for the property down payment. Now, closing was a whole different story.
How did you fund this deal?
This one, I actually funded it myself. I used my own cash. It was $51,000. I also utilized some credit cards and an unsecured loan, which is kind of a high interest rate. I’m with a credit union, eventually I would want to get that refinanced at the bank at a lower interest rate. The property’s worth about $100,000 maybe $105,000, $110,000 grand. I paid $51,000 for it.
I put about $20,000 into it. I’m renting it out right now, $1200 a month, which covers the mortgage on it. It covers the mortgage for two of my properties.
How did you approach private lenders to raise money in the past?
Private money is something I’m actually still pursuing, and that’s one thing I’ve called on Home Investors for. I’ve gone through their list of private lenders, and I’ve left several messages and emails, and some have responded and some haven’t. My first deal that I bought through Sherman Briggs, which is a hard money lender, is quite costly. They eat up a lot of my profits. But, it’s fine, if I’m going to still make $20,000, $30,000, $40,000, I’m fine with that as long as I only pay $10,000 or $15,000. Eventually, my goal is to work more with private investors.
What advice do you have for new investors?
Stay persistent and don’t give up, and just create a system. It doesn’t happen overnight. Unfortunately, I’ve got friends who went to Fortune Builders and they lost money on their first deal. They lost $15,000 to be exact, on their first deal. But they moved on and made money on their next deals. Everything is about the numbers. Numbers don’t lie. Don’t fall in love with the property, it’s the numbers that make you buy the property.
Do you usually have inspections done when buying a property?
Not always. I rely on my Instincts to be honest. I can tell a lot from pictures, and I have a repair estimator that’s pretty accurate. I can look at a property in 15 minutes and pretty much indicate how much it’s going to cost me to fix.
Did Fortune Builders teach you how to assess repair costs?
Yeah, they did train us. They took us to a house and they gave us the repair estimator and they said, “Go ahead and do it.” For the first house, they showed us how to do it. The second one, we kind of did it half and half, and the third one you had to do it on your own.
Any final questions or comments?
Well I would like to try to connect with some other investors. I know the premier membership helps with making connections. Is there any particular way that I can reach out to more investors? I know how to make the numbers work. My challenge right now is just making the right connections.
Crystal: My suggestion is to check out our private lender list. It’s going to be under the resources section of the website. You can sort them out by location. It’ll give you lenders who are opting to lend nationwide, and lenders specific to your area. I’d suggest giving them a call after 5:00 PM your time, because most lenders on our list have regular 9:00 to 5:00s, just like you’re part time, they’re part time too.
Crystal: Also, on our blog there is a meet up article posted every month, where you can look for local real estate events. I noticed that whenever you go to the real estate investors association meetings or private lender meetings, just networking with those people will help you out tremendously.
Sandel: I’m also interested in wholesaling. It’s free to post a property on you website, right?
Crystal: It is absolutely free to post a property that you have under contract on our site. You can also connect with other wholesalers who have posted deals.
Sandel: Great. I’ve learned that sometimes you just have to pull the trigger. “Well, if we don’t do this, then we’re not going to do any of them. We’ve got to just go for it.” Fear will stop you from accomplishing anything in life, so you’ve got to get past it.